Fractured US Congress fails to reach deal as deadline looms

A BITTERLY fractured US Congress was toiling over two competing packages last night to resolve the fiscal crisis gripping Washington with disaffected markets losing steam and the White House rejecting at least one of the packages as unacceptable.

After a brightening of the sky over the Capitol on Monday when Senator Harry Reid, the Senate majority leader, and his minority counterpart, Senator Mitch McConnell, appeared within striking distance of a deal to reopen the government and raise the debt ceiling if only for a matter of weeks, negotiations appeared to jam up again.

The latest difficulties emerged after a breakfast meeting yesterday of House Republicans led by Speaker John Boehner which ended with their determining that the package emerging from the Senate did not meet their minimum demands and tabling their own with new conditions attached, including on President Barack Obama's healthcare package. The White House swiftly dismissed it as "a partisan attempt to appease" the Tea Party.

It wasn't even clear that the Boehner alternative would be acceptable to a large enough number of his own Republicans to win support on the House floor with hardline conservatives asking for more. Democrats reacted swiftly, saying the country was being held hostage because of a "family feud" within the Republican caucus.

The mood in Washington was becoming increasingly fevered, with all sides watching the clock tick down to the Thursday deadline, when the Treasury says it will run out of borrowing authority to access the cash it needs to pay all the bills before it. In the second half of the month it must pay not just beneficiaries such as pensioners on social security, veterans, and serving soldiers, but also holders of American debt with insufficient funds on hand.

The White House said it had invited Democrat leaders of the House for an afternoon meeting with President Obama, though the purpose of the gathering was not exactly clear.

The Boehner plan, like that of his Senate colleagues, would look to funding the government through to early January next year and raising the debt ceiling into February. In the meantime, top congressional negotiators would attempt to hammer out a broader package on the federal budget and controlling the deficit. However, it added some additional items meant to appease the right of his party.

Those changes included a delay for two years of a tax on medical devices such as hips and pacemakers, which make up a large part of the funding pool that would make Obamacare function and also require members of Congress, the cabinet, the President and the Vice-President to buy their own coverage through the new healthcare system.

The White House rejected the House's stance.

"The President has said repeatedly that members of Congress don't get to demand ransom for fulfilling their basic responsibilities to pass a budget and pay the nation's bills," said Amy Brundage, a White House spokeswoman.

"The latest proposal from House Republicans does just that in a partisan attempt to appease a small group of Tea Party Republicans."